What are the main reason why forex trader fails?
There are lots of tips to become a successful forex trader but what are the main reason why people fail?
- Anonymous8 years agoFavorite Answer
1) Forex trading is risky
2) Bad broker (manipulating the "game")
3) High leverage and lack of money management
4) No sound understanding of fundamentals or technicals
And last but the most important point!=
5) Emotional trading (no sound trading strategy)
Everyone is trying to make a quick buck of the FX market high interest and gullable traders. There is no quick fix, and one can make a living trading the FX market if the above points are corrected.
Find a good teacher eg: www.chrislori.com (he has the actual experience- traded for the bank of Montreal, and the highest rating from the real trading community).
Good luck mate
- DavidLv 78 years ago
Trading forex is no more risky than any other trading vehicle if you scale back the leverage. Leverage is a killer, especially if you're new. In fact, the Australian Dollar (AUD/USD) is a pretty good proxy for the Dow, and not that much different to trade. The two are highly correlated right now.
So the question, to me, is not about forex at all, but about trading in general. We all have the same information, access to the same platforms and indicators, etc. Aside from some obvious drawbacks that we can do nothing about, like being under-funded, I would say most people can't stay in the game long enough to learn the game. None of us like to be wrong, so we place blame elsewhere. There is a real hesitancy to address the real issues of the responsibility of trading. Not many stay in the game long enough to learn that the real issues are not with your trading platform or indicators (there are literally hundreds, if not thousands of workable trading systems and indicators), but rather within the individual.
Assuming you learn something first and don't just start trading with abandon, assuming you develop a Trading Plan, use good risk and money management, it is still probable you will fail. We're not talking about a childish approach to trading like most of the reasons given here (we know an ignorant childish person will lose), but rather doing everything in your power to learn to be a trader. The number one reason 90% of traders fail? We're talking about some really smart people that will never become traders -- because trading is 100% psychological.
You will think that learning more and working harder will fix it, like in any other J-O-B, but it doesn't work that way in trading. It takes guts as much as brains to adhere to discipline. You go through your entire life being schooled to be correct. In trading you have to throw that out the window quick.
Certainty is predicated on a myth. Certainty can never really be had in life. Why? Because certainty can only come into being when the future is fully known. People don’t realize either that all a trader can really hope for is a superb ability to assess the odds of being right. That’s all, and we have to learn to live with that. It is a fruitless activity from which there can be no rest, for it will never end. Paradoxically, peace and clarity of mind can only come into being when one realizes that “certainty” cannot be achieved. Tomorrow can never be known. Otherwise we are inviting a future that is wrought with failure, disappointment, and dismay.
Most traders we speak with have learning curves that have cost them between $15,000 and $70,000 and up to two years in time. Most people don't have that much money to lose, or that much time to learn.
- Anonymous8 years ago
Why traders fail? Great Question!
Over the years, after training hundreds of thousands of students, I noticed that the traders that failed, in all respects, were the ones that:
1. Opened small accounts of 25$ USD or 350$ USD (Faced too many stop-outs, then margin call)
2. Were under educated
3. Did not have the market resources (Indicators, Oscillators, fundamental news, etc)
4. Had no trading plan
5. Were not confident
6. Used margin as their stop loss
- peaceandloveLv 58 years ago
Mistake number 1: Treating Forex as a get rich quick opportunity:
Mistake number 2: Beginners want to achieve great returns on a short period of time:
Mistake number 3: Thinking it’s easy to make money on Forex:
Mistake number 4: Thinking you’re smarter than the other traders or smarter than the market:
Mistake number 5: Thinking that you can make money in Forex with no work at all:Source(s): http://www.appliedfx.com
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- Anonymous8 years ago
I will make a list of traders fails:
1. Lack of knowledge
4. Wrong trading style
The easiest way to solve these fails - usage of automated Forex trading software.
As for beginner, my recommendation - ProFx, semi-automated Forex trading strategy that brought more than 350% of profit in last 14 months. See live and verified trading results on official website.
- 8 years ago
1) not following a system
2) being to greedy and not getting out of a trade when it is already profitable
3) over using leverage
4) not getting out of a trade when it is loosing
5) taking advice from someone who has not got a clue what they are on about
6) not actually having enough money to trade. It is important that you can take losses in forex
7) just placing random trades
8) using a bad broker
9) trying to use a system that they do not fully understand
10) thinking that they know everything because they won a few lucky trades.Source(s): http://www.bestforex-broker.com
- Anonymous8 years ago
The number one reason why any trader fails is through over trading!
Trading too high stakes versus how much capital they have available, a couple of bad trades and then they are soon in serious trouble.
- 8 years ago
It's a zero sum game. So if one guy wins, another one loses. The winner is usually the one with superior knowledge and experience. It takes a lot of effort and money to become successful at forex trading.
Those tips are probably provided by brokers who's only interest is to get you as a customer to receive the fee's you pay.
- bhanwar bLv 68 years ago
1) speculation is always a risky game.
2)lack of fundamentals and current event knowledge.
3)booking profit immediately and emotional binding in booking lose soon on odd situation.
4)instead speculation,arbitraging/hedging trade is safer in forex trading.